Answer the following questions.

In the Table below is information about two options that face the Alpha & Omega Company as it seeks to expand its operations. All cash flows are at the end of the year except for the initial costs. Option 1 Option 2 Initial cost $680,000 $720,000 Usage life 5 years 6 years Salvage value at end of useful life $20,000 $30,000 Cash flows (excluding salvage value): Year 1 $140,000 $ 80,000 Year 2 $140,000 $180,000 Year 3 $140,000 $280,000 Year 4 $140,000 $380,000 Year 5 $140,000 $260,000 Year 6 $ $150,000 Depreciation method is straight line Tax rate is 20% 20% Company's cost of capital 12% 12% Present value tables: Present value of $1.00 Rate per period Periods 6% 12% 1 0.9434 0.8929 2 0.8900 0.7972 3 0.8396 0.7118 4 0.7921 0.6355 5 0.7473 0.5674 6 0.7050 0.5066 7 0.6651 0.4524Present value of Ordinary Annuity of $1.00 Rate per period Periods 6% 12% 1 0.9434 0.8929 2 1.8334 1.6900 3 2.6730 2.4018 4 3.4651 3.0373 5 4.2124 3.6048 6 4.9173 4.1114 7 5.5824 4.5638 Required: (a) Calculate the net present value for each option (b) Calculate the payback period for each option (c) based on the results in (a) and (b) what course of action would you recommend to the management of Alpha & Omega Company